What does absorption costing add into the cost of a unit of product or service?
AOnly variable cost
BFair share of overhead
COnly selling profit
DOnly direct labour
Answer & Solution
Correct answer: B. Fair share of overhead
Absorption costing loads a fair share of overheads onto each unit so the full cost is shown.
Keep practising Total Absorption Costing
Browse all Total Absorption Costing questions for CA Inter, or explore more Cost and Management Accounting topics.
Related questions
In the CIMA description of ABC, activities are assigned to what?In which journal did Cooper and Kaplan publish ABC articles from 1988?Drucker said ABC also records the cost of what?What limits the use of ABC, especially in services?What is a danger of ABC, like other cost allocation approaches?The chief executive's salary stays unassigned in ABC. What are such costs termed?Why did indirect costs rise relative to direct costs in modern factories?How does ABC assign costs, rather than using broad arbitrary percentages?